U.S. airlines are asking the federal government for grants, loans and tax relief that could easily top $50 billion to help them recover from a sharp downturn in travel due to the new coronavirus.
Airlines for America, the trade group representing the carriers, posted its request for financial help on Monday saying "U.S. carriers are in need of immediate assistance as the current economic environment is simply not sustainable."
It is asking for $29 billion in federal grants, with $25 billion for passenger airlines and $4 billion for cargo carriers.
“This is a today problem, not a tomorrow problem. It requires urgent action,” said A4A President and CEO Nicholas E. Calio, in a prepared statement.
The airlines are also seeking up to $29 billion in low-interest loans or loan guarantees, and they want federal excise taxes on fuel, cargo and airline tickets to be suspended through the end of next year.
Airlines have been reducing flights since January, starting with the suspension of flights to mainland China where the outbreak began. The downward spiral in travel has picked up speed in recent days, however, prompting airlines to announce a succession of increasingly dramatic measures.
Since Friday, United, American and Delta have all announced deeper cuts in flying than they were contemplating just a few days earlier.
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According to CNBC, in Q4 2019 American Airlines posted higher profits despite problems stemming from the Boeing 737 Max. The Fort Worth-based airline reported net income of $414 million for the last three months of 2019, up more than 27% from a year earlier.
CNBC said in January 2020 Dallas-based Southwest Airlines’ fourth-quarter profit tumbled more than 21%, to $514 million, after the grounding of the Boeing 737 Max drove up the carrier’s costs. The airline said the grounding reduced Southwest’s operating income by $313 million in the fourth quarter and $828 million for all of 2019.
First quarter earnings continue through March 31.
Southwest and American are both members of Airlines for America, who advocate on behalf of the industry. The other listed members are Alaska Airlines, Atlas Air Worldwide, Delta, FedEx Express, Hawaiian Airlines, JetBlue, United, UPS and Air Canada.
